Fighting for Equity in Education

The struggle is long but hope is longer

NSW Public Schools Benefit Under Gonski 1.0

Wednesday February 21, 2018

Public schools were the main beneficiaries of the Gonski 1.0 funding plan in NSW. Public schools received a funding increase nearly double that for private schools and which reversed the previous trend of funding cuts to public schools. However, public schools in NSW remain significantly under-funded while private schools are over-funded. The NSW Government must increase its funding effort to ensure that all public schools are adequately resourced and end its over-funding of private schools.

Funding for public schools increased under Gonski 1.0
New figures show that total government funding (Commonwealth and state/territory) for public schools in NSW increased by $1,073 per student, adjusted for inflation, between 2012-13 and 2015-16 [Chart 1]. Over the same period (which includes the first 2½ years of Gonski funding), funding increased by $586 per student in private schools [see Chart 1 below]. In percentage terms, funding for public schools increased by 8.7% compared to 6.1% for private schools [Chart A1].

The large part of the increase for public schools was due to a large increase in NSW Government funding of $937 per student, an increase of 9.2%. This almost restored the cut in funding of $949 per student under the NSW Labor and Coalition Governments between 2009-10 and 2012-13. Commonwealth Government funding for public schools increased by $135 (6.3%) per student between 2012-13 and 2015-16, which was slightly less than in the earlier period between 2009-10 and 2012-13.

The Gonski 1.0 funding plan was designed to target funding increases to disadvantaged schools and students. The NSW Government was the first state government to design a needs-based funding scheme compatible with Gonski 1.0. The Resource Allocation Model (RAM) was introduced in 2014 by the NSW Coalition Government to better target state funding for public schools. It resulted in a large increase in funding (adjusted for inflation) of $745 per student in 2013-14. However, the increases in the following years were much smaller – $27 per student in 2014-15 and $165 in 2015-16.

Almost all the increase in private school funding was provided by the Commonwealth. It increased funding for private schools by $505 (7.3%) per student between 2012-13 and 2015-16, which was similar to the increase of $481 per student between 2009-10 and 2012-13. NSW Government funding increased by $81 (3.1%) between 2012-13 and 2015-16 compared to a cut of $25 per student in the earlier period.

Over the whole period 2009-2010 to 2015-16, the increase in total government funding for public schools was only $321 per student compared to $1.041 for private schools [Chart 2]. In percentage terms, funding for public schools increased by only 2.5% compared to 11.5% for private schools [Chart A2]. Commonwealth funding for private schools increased by $986 per student compared to $332 in public schools. NSW Government funding for public schools fell by $12 per student while funding for private schools increased by $54 per student.

NSW public schools will be under-funded under Gonski 2.0 while private schools are over-funded
Despite the recent increases in funding, NSW public schools remain significantly under-funded while Catholic and Independent schools are over-funded and will remain so under Gonski 2.0 unless the NSW Government re-directs its funding.

Under the Turnbull Government’s Gonski 2.0 funding plan, future funding increases for public schools are largely left to state/territory governments. It caps Commonwealth funding of public schools at 20% of their Schooling Resource Standard (SRS), but NSW Government funding is well below 80% of the SRS.

In 2018, Commonwealth funding of NSW public schools is 17.7% of their SRS and is due to increase to 20% by 2027. However, NSW Government funding for public schools was only at 71% of their SRS in 2017 (the 2018 figure is not available). If the NSW Government fails to increase its funding share, public schools will be funded at only 91% of their SRS by 2027.

In contrast, NSW Catholic are already funded at 100% of their SRS and will become over-funded once Gonski 2.0 is fully implemented. In 2018, Commonwealth funding of Catholic schools amounts to 78% of their SRS and is due to increase to 80% by 2027. However, NSW Government funding is currently at 22% of their SRS. Catholic schools will be funded at 102% of their SRS by 2027 unless the NSW Government reduces its funding share.

Independent schools are already over-funded and it will increase by 2027 unless the NSW Government reduces its share of their SRS. Commonwealth funding of NSW Independent schools is at 76% of their SRS and is due to increase to 80% in 2027. However, NSW Government funding is 27% of their SRS so that they will be funded at 107% of their SRS by 2027 unless the Government reduces its funding share. In 2017, 22% of Independent systems and schools were funded at over 100% of their SRS. This will increase to 72% by 2027 and the number of over-funded systems and schools will increase from 65 to 212 unless there is a change in NSW Government funding policy.

The challenge for the NSW Government is to ensure that school funding in the state is fully distributed according to need in the future. This requires increasing the state share of funding for public schools to 80% of their SRS and removing over-funding of private schools. The importance of such a change in funding policy is to increase the proportion of disadvantaged students in NSW who achieve a Year 12 education and reduce the large achievement gaps between advantaged and disadvantaged students.

Attachment: Data issues and sources
The funding data used here is drawn from the latest Report on Government Services (ROGS), but the figures here differ from those published in the report in two ways. First, the figures here exclude book entry items (user cost of capital, depreciation) and other items (payroll tax, school transport) which are included in state/territory government funding of public schools. These items are not included in funding figures for private schools published in ROGS and, as a result, funding public schools is over-estimated in comparison with private schools. These items are excluded from the funding figures for public schools published on the My School website on the advice of the accounting firm Deloitte Australia.

These items accounted for 28% of total current NSW Government funding of public schools in 2015-16 and accounted for 32% of the current dollar increase in between 2009-10 and 2015-16. Inclusion of these items therefore substantially over-estimates the actual funding of public schools.

Second, ROGS uses the General Government Final Consumption Expenditure, Chain price Index (GGFCE) to adjust current dollar figures for inflation. However, this price index does not distinguish between different rates of cost increase in different areas of public service provision. Instead, the Wage Price Index for Public and Private Education and Training is used here to deflate nominal funding figures. This price index increased by more than the GGFCE between 2009-10 and 2015-16, indicating a higher cost increase. The GGFCE increased by 13 percentage points compared to an increase of 17.3 points on the Wage Price Index. The ROGS method of adjusting for inflation under-estimates increasing costs for schools and, therefore, over-estimates the actual increase in real resources available to schools.